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Canada steel import protections tighten: Reduced quotas and global tariffs

Updated: January 06, 2026

Starting Dec. 26, 2025, Canada will tighten steel import rules by reducing quotas, adding a 25% global surtax on steel derivatives, and expanding CBSA enforcement. Canadian businesses should brace for higher costs, faster quota depletion, and stricter compliance demands.

On Nov. 26, 2025, Prime Minister Carney announced measures to protect Canada’s steel industry from global overcapacity and U.S. tariff disruptions. These measures were formalized on Dec. 12, 2025, when the government confirmed the new rules and provided further details.

What’s changing (effective Dec. 26, 2025)

  • Tariff Rate Quotas (TRQs) for steel mill products will be reduced:
    • Non-FTA countries: Quotas cut to 20% of 2024 levels; imports above that threshold face a 50% surtax.
    • FTA partners (excluding U.S. and Mexico): Quotas reduced to 75% of 2024 levels, with the same 50% surtax on over-quota imports.
  • New 25% global surtax applies to steel derivative products worldwide, including the U.S. and Canada, based on the full value of a good where steel is significant (e.g., wind towers, prefabricated buildings, fasteners, wires, chains, doors/windows, metal furniture, bridges).

What’s not changing…yet

  • U.S. and Mexico under the Canada-United States-Mexico Agreement remain exempt from these changes.
  • General tariff remissions continue in certain circumstances:
    • Extended to Jan. 31, 2026, for steel goods (except motor vehicles/aerospace, which extend to June 30, 2026).
    • Extended to June 30, 2026, for aluminum goods and goods for public health, safety, and national security.
  • Specific tariff remissions may be considered on a case-by-case basis where goods cannot be reasonably sourced from domestic suppliers or where exceptional circumstances would result in severe adverse impacts on the Canadian economy.

Strengthened CBSA enforcement

While our recent alert, Marine shipments under increased scrutiny by Canada Border Services Agency (CBSA), focused on marine shipment scrutiny, CBSA is now taking enforcement to the next level across all entry points especially for steel imports. This broader compliance initiative includes a dedicated steel compliance team tasked with monitoring steel trade and ensuring adherence to new measures. CBSA is also deploying advanced tools to detect false declarations and expanding tip-reporting channels. Importers should expect more frequent verifications and audits, particularly for steel and derivative products, as part of this nationwide enforcement ramp-up.

Impacts on Canadian importers

Businesses should prepare for the following challenges:

A stylized illustration of a shipping container shown in three-quarter view, with red horizontal lines on one side and black vertical lines on the other.
Higher landed costs on over-quota steel and all covered derivative products due to the 50% surtax and new 25% global tariff.
Icon of a speedometer with a red arrow forming a partial circle, suggesting fast time or quick turnaround.
Accelerated quota depletion, increasing the risk of unexpected surtax exposure mid-year.
Icon of officer wearing a peaked cap and uniform, holding a red document.
Heightened CBSA enforcement, which may lead to border delays and compliance risks.
Icon of a document with a red checkmark and a stamp, symbolizing approval or certification.
Greater administrative requirements, including stricter documentation and classification accuracy.

Our recommendations

  1. Assess exposure: Map imports against the list of targeted steel derivatives and origins to quantify surtax/over-quota risks.
  2. Explore alternatives: Shift to domestic sources to avoid surtax. 
  3. Bolster compliance: Update tariff classification/origin processes and train staff for heightened scrutiny.
  4. Mitigate costs: Pursue duty relief/drawback, advance rulings, or remission claims.

How we can help

Our Customs and International Trade Services team can help you navigate these changes with practical, actionable solutions.

For more resources, visit our Tariff Readiness Hub.

Brian Morcombe
Partner, Indirect Tax Leader
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Charmaine Goddeeris
Director, Indirect Tax
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The information in this publication is current as of December 15, 2025.

This publication has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The publication cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice. Please contact BDO Canada LLP to discuss these matters in the context of your particular circumstances. BDO Canada LLP, its partners, employees and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it.